Value Added Tax (VAT) is an indirect tax that is added. The cost of products at each stage of their creation and sale. In fact, such a tax is paid not by the seller. But by the buyer of the product, because it is already includd in the final price of the product or service. In turn, the business simply “collects” it from consumers and later transfers it to the budget in equal shares.
Each of us has noticd a separate line for VAT on a store receipt. This is an example of a tax paid by the buyer, not the manufacturer.
Let’s explain with a clear example. The VAT rate is 20%.
A flour producer has a field and a mill. He makes flour facebook database from scratch. And sells it for 50 rubles per 100 grams and adds VAT of 20% (10 rubles) to the amount.
The buyer, representd by a bakery, pays, for example, 60 rubles to the flour manufacturer: 50 rubles directly for the flour and an additional 10 rubles of VAT. The flour manufacturer transfers VAT to. The budget according to the establishd rule – 10 rubles.
Next, the bakery uses 100 grams of flour
To bake one loaf of bread. It sells it to the store for 80 rubles, charging VAT at 20% (16 rubles). The store pays the bakery 96 rubles: 80 rubles for the bread + 16 rubles VAT. In this case, the bakery transfers to the budget only the last 6 rubles – the difference between its VAT (16 rubles) and the VAT already paid on the flour (10 rubles).